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Delta offering severance payouts to trim staff by 2,000

Delta Air Lines said Tuesday it will offer
voluntary severance payouts to roughly 30,000 employees - more than
half its work force -- and cut domestic capacity by an extra 5
percent this year as part of an overhaul of its business plan to
deal with soaring fuel prices.

Executives at Atlanta-based Delta said in a memo to employees
that the airline's goal is to cut 2,000 frontline, administrative
and management jobs through the voluntary program, attrition and
other initiatives.

A spokeswoman says that if more than that amount agree to take
the voluntary severance, that will be allowed.

The severance
program primarily affects mainline Delta employees. It will not
affect Delta pilots, who have a union contract with the company,
and employees at Delta regional carrier Comair, which is based in
Erlanger, Ky.

Delta had 55,044 total full-time employees as of the end of last
year.

Oil prices recently cracked $111 a barrel, nearly twice what
they were a year ago.

The memo from Chief Executive Richard Anderson and President Ed
Bastian did not mention Delta's talks with Northwest Airlines Corp.
about a combination that would create the world's largest airline.
Bastian was updating investors Tuesday at a conference in New York.

On Monday, Delta's pilots union said it had told company
executives it can't agree on seniority issues with its counterpart
at Northwest, raising serious doubts about the prospect of a
combination of the two companies.

The disclosure was made in a letter from the head of the pilots
union at Delta, Lee Moak, to rank-and-file Delta pilots.

The letter does not mention Northwest, but describes the union
that Delta's pilots had been negotiating with as the only one they
were focused on talking with. Multiple officials close to the talks
have said in recent months that the other company was Northwest.

The letter talks about the discussions with the other carrier in
the past tense, suggesting at least for now there won't be further
talks.

The two carriers don't need a pilot seniority integration deal
in advance to move forward with a combination, but Delta Air Lines
Inc. executives have said they would not move forward with any
combination unless the seniority of their employees was protected.

A Delta-Northwest combination deal could proceed without a pilot
seniority agreement, but that would be up to the boards of the two
companies.

At least one airline analyst, Calyon Securities' Ray Neidl,
sounded doubtful that will happen, at least in the near term.